Open Checkbook for Unchecked Growth

The North Carolina House of Representatives carried a good idea to the one-yard-line in the recent legislative session. But with the clock running out, they fumbled it away.

The good idea was a one percent cap on University of North Carolina enrollment increases in the House’s version of the 2010-11 budget. The university system has been gradually placing a heavier burden on taxpayers over time through expansion for a long time. More young people than ever are attending college today—enrollment increased 3.1 percent last year—and residents pay over four times as much out of every dollar earned to subsidize higher education than they did in 1941. Such uncontrolled growth is unsustainable, and with the current need to cut state spending, the timing is right for such an enrollment cap.

But news of the cap caused outrage in all the predictable places. According to its opponents, a cap will end North Carolina’s higher education system as we know it. They railed that it violates state traditions, that it will limit access to education for the poor and minorities, and that it will damage our economic future.

These opponents mounted an all-out goal-line defense against the cap in the hallways and conference rooms on Jones Street and in the media, and it was dropped from the final budget bill during negotiations with the Senate.

Yet a cap will do none of the things that opponents claim it will do. It represents a common sense approach for dealing with a changing reality, one in which the state government must limit spending or risk bankrupting the state. The UNC system has long been on the receiving end of the legislature’s generosity in good times, sometimes excessively so. This year, acknowledging that this must change, Ray Rapp, the chairman of the House education appropriations committee, said that there cannot continue to be an “open checkbook ” for UNC’s growth.

At the June 10th Board of Governors meeting, UNC system President Erskine Bowles objected vigorously to the thought of the university turning away “qualified” students “for the first time.” But the system has always turned away students. UNC-Chapel Hill annually rejects two-thirds of its applicants. Even Fayetteville State University, with its abysmal 31.5 percent six-year graduation rate, turned away 23 percent of its applicants for the 2009 fall term.

And the word “qualified” is a misnomer. Before 2009, there were no system-wide objective minimum standards for acceptance. Soon after taking office, Bowles pushed to establish system-wide minimum standards of high school grades and SAT scores for the first time. Previously, admission was based only on subjective decisions made by university admissions staff.

There is little difference in results or fairness between establishing minimum standards—as Bowles directed the system to do—and placing a cap on enrollment, as the House intends to do. By shifting standards upward, the schools are effectively reducing the number of “qualified” students that can be accepted, as if placing a cap. Placing a cap on enrollment forces schools to pick candidates with better credentials, just as if standards had been raised. One method is not morally superior to the other.

Furthermore, according to Bowles’ numbers, if the cap was in place this year, it would reduce UNC enrollment by only 2,700 students of the approximately 227,000 expected to attend in the fall. This would have only an insignificant long-term effect on the state economy. The cap means that a few students who would now be admitted to UNC-Chapel Hill will have to go to private schools, or drop down to the next-most-prestigious schools in the university system: N.C. State, Appalachian, Wilmington, or Asheville. And a few more students at each of those four schools will have to drop down to the next tier, and so on.

Despite the rhetoric, no students will be denied a highly subsidized public education as a result of this cap. A few will have to go to a less prestigious UNC school than they hoped for, and a few more will have to begin their college careers at the community colleges, where they will have a second chance to show that they can perform university-level academic work. For the students denied admission to any school in the system will be the ones who are the least likely to thrive academically. It is not too much to expect that they first prove themselves deserving of the roughly $12,000 subsidy taxpayers pony up for each UNC student each year.

The House bill will both save money—roughly $20 million per year—and improve the intellectual atmosphere and graduation rates at UNC schools. In a system of 227,000 students, with a six-year graduation rate of 58 percent, it is almost certain that the 2,700 of students least likely to do well will generally perform poorly and drop out.

Additionally, the economy is saying what university administrators and some politicians don’t want to hear. In the last decade, in good times and bad, the real wages of college graduates have been falling, unlike the previous two decades. Spending more money to produce more graduates, when demand for their services is waning, will reduce incomes further. If the university system will not put limits on itself, then it is up to the legislature to play the grown-up. The cap should be reintroduced during the next legislative session.